Significant and widespread cognitive impairments are a core feature of schizophrenia, providing a window into underlying neuropathophysiology while serving as a robust predictor of long-term functional outcome. The recently completed Measurement and Treatment Research to Improve Cognition in Schizophrenia (MATRICS) project demonstrates the commitment of the NIMH to enhancing our understanding of cognitive deficits in schizophrenia. Within the context of research in first episode schizophrenia at the Zucker Hillside Hospital, neurocognition is considered both as a critical target of treatment and as a predictor or mediator of illness course. The primary aims of this proposed CIDAR project involve the use of early neurocognitive measures to predict functional outcome during a 52-week controlled treatment algorithm, as well as acute symptomatic response during the initial 12-week randomized clinical trial. At the same time, measures collected over the course of this project will also serve as outcome variables for other projects in this CIDAR, including Project 2 (Magnetic Resonance Imaging) and Project 4 (Pharmacogenomics). We will utilize the MATRICS battery composite score to predict long-term (52-week) functional outcome in employment, residential status, and social functioning. In addition to the traditional neuropsychological measures in the MATRICS battery, the proposed project will employ complementary methods, derived from recent cognitive neuroscience research. Such measures are designed to more specifically assess functions sensitive to dopaminergic tone and other aspects of prefrontal cortico-cortical and cortico-subcortical circuits critical to illness and treatment. In particular, we aim to predict positive symptom response secondary to dopaminergic modulation by second-generation antipsychotics, after 12- and 52-weeks of treatment, using a set of tests (N-Back working memory test, Competing Programs, and Intradimensional/Extradimensional Set Shifting) that have been empirically demonstrated to be sensitive to dopamine manipulations and/or COMT genotype. We also hypothesize that specific tasks tapping motivation and behavioral production will predict negative symptom response, and semantic processing measures will predict disorganized symptoms. Finally, we will explore the possibility that early changes in cognition (between baseline and 12 weeks) may also be predictors of long term response and outcome, insofar as early improvement may reflect neural plasticity phenomena related to symptom remission.